eeded tax reform and, in 2006, became
eligible for the heavily indebted poor countries (HIPC) initiative.
Progress fighting corruption, further restructuring of domestic
industry, and success in attracting foreign investment are keys to
future growth.

Laos
The government of Laos, one of the few remaining one-party
Communist states, began decentralizing control and encouraging
private enterprise in 1986. The results, starting from an extremely
low base, were striking - growth averaged 6% per year in 1988-2007
except during the short-lived drop caused by the Asian financial
crisis beginning in 1997. Despite this high growth rate, Laos
remains a country with a underdeveloped infrastructure, particularly
in rural areas. It has no railroads, a rudimentary road system, and
limited external and internal telecommunications, though the
government is sponsoring major improvements in the road system with
support from Japan and China. Electricity is available in urban
areas and in most rural districts. Subsistence agriculture,
dominated by rice, accounts for about 40% of GDP and provides 80% of
total employment. The economy will continue to benefit from aid from
international donors and from foreign investment in hydropower and
mining. Construction will be another strong economic driver,
especially as hydroelectric dam and road projects gain steam.
Several policy changes since 2004 may help spur growth. In late
2004, Laos gained Normal Trade Relations status with the US,
allowing Laos-based producers to benefit from lower tariffs on
exports. Laos is taking steps to join the World Trade Organization
in the next few years; the resulting trade policy reforms will
improve the business environment. On the fiscal side, a value-added
tax (VAT) regime, slated to begin in 2008, should help streamline
the government's inefficient tax system.

Latvia
Latvia's economy experienced GDP growth of more than 10% per
year during 2006-07. The majority of companies, banks, and real
estate have been privatized, although the state still holds sizable
stakes in a few large enterprises. Latvia officially joined the
World Trade Organization in February 1999. EU membership, a top
foreign policy goal, came in May 2004. The current account deficit -
more than 22% of GDP in 2007 - and inflation - at nearly 10% per
year - remain major concerns.

Lebanon
The 1975-90 civil war ser